A business wing of the Amhara Regional State is going to invest close to two billion Birr to construct the nation’s largest steel cold rolling mill complex in Bahir Dar, 578km north-west of Addis Abeba.

Abay Industry Development S.C. (AID) is searching for a company to construct the complex with a production capacity of 300,000tn of coil and sheet a year. The selected company will be hired for the design-build project and will supply the material inputs, engage in civil construction, install and commission the production components and perform a test trial of the steel complex when completed.

AID was established last year as a public-private partnership with four billion Birr registered capital raised from about 516 investors and state-owned enterprises in the Amhara Regional State. The company was established to develop 22 different industries in the region including steel, cement, fertilizer, textiles, chemicals and commercial farming.

Upon completion the steel complex, to be located in Hidar 11 District of Bahir Dar, is expected to provide job opportunities for over 286 employees.

CH International Corporation, a Korean company established a decade and a half ago, was hired to prepare the tender documents and to be engaged in the process of selecting the contractor and supervising the construction activities. Represented by EKOS Steel Mill Plc, its sister company, CH opened an office in Ethiopia a year ago. EKOS Steel Mill entered Ethiopia in 2014 and has been constructing a steel factory in Dukem, Oromia Regional State on 10ha of land with a total investment of around 700 million Br. The factory in Dukem will have a yearly capacity of 210,000tn rebar products a year in its first phase.

AID’s new project, dubbed Greenfield Metal Products Manufacturing Project, is expected to take three years to complete and to initiate production, according to Shell H. Choo, CEO of EKOS Ethiopia.

“Once we selected the company that will build the complex, construction will commence shortly,” Choo told Fortune.

The planned factory will have a push-pull pickling line that will remove rust and scale from steel, as well as a reverse cold rolling mill and batch annealing furnaces – a process of heating the steel, soaking it at that temperature and then cooling it. It will also galvanize steel sheets to increase their corrosion resistance and color coating. Finally, the plant will slit the coil to a range of thickness from 0.1-19mm and cut the sheet to the required length, respectively.

The Amhara Regional State administration has pledged to cover around 25pc of the capital of the company. So far, the company secured capital pledges amounting to 3.25 billion Br, of which 0.99 billion Br is paid capital. Abay plans to float shares valued at 750 million Br to push its paid-up capital to 1.7 billion Br.

Apart from the metal factory, it plans to set up a cement factory at Dejen, 240Km north-west of Addis Abeba, two furniture factories in the cities of Debre Tabor and Debre Berhan and a textile factory in Gondar. A year ago, the company laid the foundation for a one billion Br woodmill plant to be located in Woldiya town, Amhara Regional State.

Demiss Teshager, general manager of Abay, declined to comment on the issue.